On bandwidth quotas and streaming video

If Canada isn’t off your radar completely, you’ve probably heard about the recent fuss over a CRTC ruling that effectively forced independent Internet service providers to implement usage-based billing. The Canadian government now seems likely to throw the ruling out the window, no doubt to the relief of most consumers here. Being still very much a guest in the Great White North, I’ve watched from the sidelines as the situation has progressed—and as my own ISP, Shaw, has quietly rolled back a 25% increase in my 100GB bandwidth quota, with plans to start charging overage fees of $1 per gigabyte this month.

I won’t pretend to like Shaw’s change in policy, even if my particular service wasn’t rendered as unattractive as others. Shaw’s cheaper Internet plans with lower quotas are subject to $2/GB overage fees, which as this infographic nicely illustrates, are very much unreasonable. Regardless, the Canadian government’s backlash against the CRTC decision seems encouraging. As a French citizen, I’m more used to my government trying to pass stupid, repressive Internet legislation than looking out for the benefits of consumers. Here’s hoping things keep moving forward in that direction here.

Metered Internet access isn’t a new concept at all, though. We’ve seen ISPs all over the world implement bandwidth quotas. I think part of the problem, especially in countries like Canada and the States where Internet connectivity is sold by cable companies, must be the meteoric rise of online video.

A recent usage study by Cisco showed that peer-to-peer file sharing is no longer the single biggest source of traffic on the Internet. Far from it. As of October 2010, P2P sharing made up 25% of all ‘net traffic (down from 38% in 2009), while online video accounted for a whopping 26%. That figure is no doubt going to increase over the next few years.

Of course, odds are much of that online video streaming replaces, rather than supplements, cable TV. Our last poll revealed that almost equal percentages of TR readers consider cable TV and online streaming to be their primary source of video content—22% vs. 20%, respectively. It’s perfectly understandable. DVRs can be awkward to use and expensive to buy or rent. Without a DVR, having to arrange your personal schedule around TV shows is totally last century. Meanwhile, streaming services like YouTube, Hulu, and Netflix provide free or very cheap content all the time, everywhere, be it on your cell phone, your Xbox, or your laptop at work.

The enemy. At least for now.

In a way, I believe what cable providers are currently experiencing resembles the seismic shift the music industry underwent at the beginning of the last decade. The Internet is, once again, causing an old, tried-and-true business model to fall apart… except this time, business is being lost not to college kids downloading music illegally on Napster but to honest cable TV subscribers using entirely legal services with the blessing of content publishers.

Curbing the growth of streaming video by imposing quotas on bandwidth usage seems like a quick, knee-jerk reaction to this change, much like the RIAA’s mass lawsuits were several years ago. But is it sustainable?

On the one hand, you could argue that ‘net bandwidth isn’t inherently free, and if we pay for electricity or telephony based on our consumption, it makes sense that Internet billing be metered, as well. I personally don’t see any problems with that stance, just so long as ISPs charge reasonable rates for bandwidth. The $2/GB rates we’re seeing from some Canadian ISPs don’t fall under that umbrella, as I pointed out above. At those kinds of prices, if my math is right, downloading a season of Lost in HD might cost you as much as the DVD box set in bandwidth fees alone. Try a buck or two, and we’ll be in business.

On the other hand, cable companies could be much more clever about all this and start offering online streaming services of their own, which they could monetize directly. What if you could get the same selection and service as Netflix from a hypothetical cable ISP service, but the ISP service was free as part of your TV or Internet bundle? I would switch to the ISP service in a heartbeat, and I’m sure a lot of other folks would, too. Implementing such services might be tricky to pull of for smaller cable companies, but I’m sure such firms could pool their resources together and share revenue among themselves. Alternatively, TV networks could shoulder the load and offer deals to cable providers that would be similarly enticing to their customers.

Ultimately, I think it’s pretty clear that the Internet is becoming a unified playground for all of the world’s information—be it video, music, telephony, or the web. The sooner big, decades-old industries realize this fact and begin transitioning to the ‘net, the better for all of us. We saw the music and movie industries make this move, thanks in no small part to Apple and iTunes. Perhaps this decade, we’ll see Internet service providers and cell carriers make the switch—to Internet TV and VoIP, respectively, both with unmetered and unfettered access to the rest of the Internet.

I’m keeping my fingers crossed.

Comments closed
    • zqw
    • 9 years ago

    The hypothetical service you speak of is TV Anywhere. You need an expensive cable subscription in addition to internet. They want to keep their margins bigger than what Netflix/Redbox/Amazon/Google wants, so they’re trying to cripple competitors. The few meaningful Net Neutrality laws are being repealed as we speak. Just think what Comcast+NBC will be able to do.

    Artificially maintaining these margins is very short term thinking tho.

    • oMa
    • 9 years ago

    Just ordered a private fiber line to mye house(norway). We chose the cheapest option, 30/30MBit/s. No cap. Those north american ISP’s are nazi.

      • CaptTomato
      • 9 years ago

      30/30MBit/s.

      Is that up and down?

      • Ari Atari
      • 9 years ago

      And it cost an arm and a leg right?

        • havanu
        • 9 years ago

        Probably around 30€ a month.
        That’s what we pay here for 20down/3.5up mbit/s with no download cap.
        (Here being Belgium…)

    • Meadows
    • 9 years ago

    Just to brag, family has 120 Mb/s (upstream is 10 Mb/s) for the equivalent of, what, something like $39 (currency-converted)?

    Edit: per month, no overage fees, not metered.

    That’s a lot of Linux ISOs per one hour.

      • Meadows
      • 9 years ago

      Wow, someone’s jealous, can’t imagine why else give it thumbs down.

        • paulWTAMU
        • 9 years ago

        that’s exactly why I gave it a down. Childish but damnit I’m jealous 🙁 I get 1.5 megs down…*cry*

      • Johnny5
      • 9 years ago

      What country?

        • Meadows
        • 9 years ago

        I have family in Hungary, their provider is UPC (Dutch company).

          • NeelyCam
          • 9 years ago

          Government subsidies?

            • Meadows
            • 9 years ago

            I don’t think so, but the competition sometimes offers competitive services and Europe as a whole has very good service (in theory) in most countries as far as I know. The ever-elusive Scandinavian high standard of living comes to mind, for example.

    • dashbarron
    • 9 years ago

    After years of horrid dialup service I considered myself lucky to find a decent, albeit tad pricy, wireless ISP. Then just recently they merged with another company and imposed a monthly data cap of 5gb + $2/gb fee – I about choked on my cud. They sent me a mail describing the changes and what sort of things I could do with it, making it seem pretty impressive. I thought this was ridiculous, going from unlimited (with a potential to throttle for sustained downloads) to a measly 5gb, esp when considering other big carriers have a limit into the hundreds. And considering I had just purchased Netflix and seeing the recent coverage on Neftlix v. every ISP, I thought the letter stating that with my 5gb datacap I could “stream one online movie,” I found this new change even more absurd.

    • Arclight
    • 9 years ago

    It’s funny how this came back in fashion. I think we had this in my country till 2004, then the new service providers came out with unlimited downlod crushing the old ISPs. Seems like the old ideas are coming back to bite us in the arse.

      • burntham77
      • 9 years ago

      one can only assume that is what will happen if metered service becomes the norm.

    • Nutmeg
    • 9 years ago

    £18 a month unlimited 24mb checking in :smug:

    • The Dark One
    • 9 years ago

    I watched some of Conrad von Finckenstein’s appearance before a Parliamentary committee about this just a day or two ago. He tried explaining to the MPs that Bell’s IPTV service wouldn’t count towards congestion because it doesn’t technically travel over the internet. It still has to travel over that last mile that the big ISPs are always complaining about being congested. He also downplayed Netflix as the culprit and blamed “3D games”.

    The guy’s either way over his head or actively working against the public.

      • DF bobo
      • 9 years ago

      …Or Bell waved some money under his nose.

    • Coulda
    • 9 years ago

    “To find out what is a fair price, I contacted several industry insiders. They informed me that approximately four years ago, the cost for a certain large Telco to transmit one gigabyte of data was around 12 cents. That’s after all of its operational and fixed costs were accounted for. Thanks to improved technology and more powerful machines, that number dropped to around 6 cents two years ago and is about 3 cents per gigabyte today.”

    [url<]http://www.theglobeandmail.com/news/technology/gadgets-and-gear/hugh-thompson/what-is-a-fair-price-for-internet-service/article1890596/[/url<] If shaw keeps UBB, i'm switching to novus or telus.

      • Spune
      • 9 years ago

      I read that a few days ago and found it very interesting, I have no problem paying but lets keep things reasonable and keep the BS from the Telcos/cable companies in check.

      Telus so far has never charged me for going over my limit (200GB) they did cut me off one time when I forgot my torrents running, but turned things right back on after a warning. I pass my limit almost every month. I wouldn’t mind paying the overage as long as the price is reasonable ($2/GB is not!) and the limits are kept (25GB/month is not!)

      I’m not a huge fan of Telus but so far they have been fair and the speed is pretty good as I live in virtually the middle of nowhere and we don’t have another real option.

    • sjl
    • 9 years ago

    Cry me a river.

    I live in Australia. Here, if I go over quota on my Internet plan, I have a choice. I can have my speed dropped down to 128 kbps, or I can pay for a datablock. Prices range from $AU2.50/GB (for the smallest datablock), down to $AU1/GB (for the biggest datablock – 50 GB.) I pay $70/month for a 60 GB quota (downloads only, uploads unmetered, naked ADSL2+).

    This is on one of the higher quality ISPs (Internode, if you want to know.) Other ISPs have higher quota plans for lower prices, but their networks tend (in my experience) to be less reliable.

    Oh, but as a sweetener, there are some services that are not counted towards my download quota. Australian Steam servers, for example, and some streaming video sites (like the Australian Broadcasting Corporation’s iView service.) There are others; this is just indicative.

    So yeah, going from a world where you don’t pay for excess data charges to one where you do kinda sucks … but the latter is all too common in some parts of the world.

      • dragmor
      • 9 years ago

      I’d say its ironic that Australia is finally getting its act together with quotas and the rest of the world is moving towards what we had 5 years ago. I guess the difference is that data has always been expensive for our ISPs. The international undersea cables cost money and most content consumed until recently has come from OS.

      In Australia it was Unlimited in 1999, then 3GB in 2000, then 12GB in 2004, 24GB in 2008 and now 500GB-1TB. Even Bigpond and Optus have cheap plans with fast connections and 100GB download.

        • FubbHead
        • 9 years ago

        Rest of the world, what you had 5 years ago? Uhu? o.O

      • derFunkenstein
      • 9 years ago

      Just because you have a quota doesn’t mean that it’s fine to allow ISPs to continue rolling them out.

        • sjl
        • 9 years ago

        I never said it is. I’m simply pointing out that, hey, this sort of thing is the norm in some parts of the world. Maybe it’s worth considering [i<]why[/i<] it's the norm. And, no, it's not because ISPs are out to gouge you for every cent they can - assuming reasonable competition (which is definitely the case in Aus), they're not going to last long if they try. A quick look at [url=http://web.archive.org/web/20021206020533/adsl.internode.on.net/pricing/price-list-personal.htm<]Internode's pricing from December 2002[/url<] shows that, for the price they charge for a 60 GB quota on a naked plan (ADSL2+) now, you could get a whopping 3 GB of quota on a 256 kbps connection. Technology marches on, and data does get cheaper. Maybe - just maybe - it's the ISPs realising that their networks are getting hammered, and that they have to pay for upgrades somehow. In the meantime, they have to manage what they have so that their customers don't suffer too much - and that means finding ways to constrain their heavy customers' usage. They can either throttle throughput on the quiet, and hope nobody notices (which is bound to bite them in the backside); or they can put in quotas. That buys them time to upgrade their network to cope with the data surge. Yeah, maybe they should be a bit more proactive about it, maybe there are other ways they can do it ... but instead of whinging about how it affects you personally, it might be useful to step back and look at the bigger picture. If you're not happy with the price your ISP charges for the service it provides, maybe there's another ISP you can move to. If there isn't another ISP you can move to, and you reckon you can do a better job than the incumbent, maybe you should get together a few like-minded geeks and start up a company. If you're right, you'll do pretty well for yourself. If you're not right, gee, maybe it's a tad more complicated than you think it is.

      • CaptTomato
      • 9 years ago

      “This is on one of the higher quality ISPs”

      I’m on 307gig for 60-$70m with old AANet.

    • crazybus
    • 9 years ago

    [url<]http://www.crtc.gc.ca/eng/com200/2011/s110203.htm[/url<] Reading the Chairman of the CRTC's speech he seems perfectly fine with effectively penalizing what he considers "heavy" internet users, which I guess means everyone who uses more than the 15.4 gigabits [sic gigabytes?] that was apparently the average in 2009. He also equates internet service with other utilities, which isn't completely valid since there are no ecological advantages to conserving bandwidth. It's only natural that as more content is transferred over IP, bandwidth needs will rise. Those who are on the cutting edge of IP delivery consumption shouldn't be penalized for it. It's one thing to reasonable bill for use, but these measures are intended to keep revenues high while at the same time keeping service levels at the same level (or worse). And if the problem is traffic congestion at peak times, how do data transfer caps help again?

    • phez
    • 9 years ago

    Bell Canada offers a $5/40GB “insurance” package. By the maths, thats $25 for 200gb of bandwidth capacity.

    Food for thought.

      • Ari Atari
      • 9 years ago

      But why sell it as “insurance”? Why not just sell a plan with a higher cap? This “insurance” really isn’t protecting you from anything, just giving you more data to use.

        • phez
        • 9 years ago

        Its insurance against their regular $2/gb over limit charge ($1/gb on faster plans)

        … which is why the whole situation is, quite frankly, BULLSHIT. Gouging right in the face of the public and our regulators are completely blind to the fact.

          • Ari Atari
          • 9 years ago

          What I meant was that this is an inappropriate use of the term “insurance”. I think of phone plans: if you think you will use more minutes, you buy a bigger phone plan.

            • phez
            • 9 years ago

            They use the word themselves 😉

            [url<]http://www.bell.ca/shopping/40-GB-Usage-Insurance-Plan/VasIntInsurance.details[/url<]

            • Ari Atari
            • 9 years ago

            Yes, that is what I don’t like… nevermind…

      • Firestarter
      • 9 years ago

      ~13 cents per gigabyte sounds entirely reasonable, and if combined with a similarly reasonable base price for the connection I don’t see why we have to deal with bandwidth caps.

      • 00-Evan
      • 9 years ago

      I sure wish I could swap to bell though. Despite Bell’s better service and more generous caps the best plan they offer in my area is 1 tier above the ‘granny who checks her email and nothing else’ plan.

    • KarateBob
    • 9 years ago

    Internet backbones are expensive to maintain. Bandwidth isnt free. People don’t complain about pay-as-you-go phone service or food at restaurants. But they complain about internet, because the leechers are gluttonous.

    Netflix should setup CDNs in central locations inside of ISP’s networks. to offload the traffic from the backbones, and mirror the most common data to the local customers.

    It’s not rocket science, it’s basic network engineering.

      • Game_boy
      • 9 years ago

      I’ll quote someone on Ars in response, it is a great argument:

      Metering is fine, but you have to make it fair.

      First, the ISPs must provide, at their cost, a fully certified standalone meter. Just like my water, gas and electricity meters, I can read them on my own. Like my other utility meters, it must be sealed by the calibrating agency. In the event of a discrepancy, the meter is considered accurate.

      Second, the ISP must provide full speed. Just like my gas, water and electricity let me use up to the safe limits, the ISP must provide full technical speed. Not 5Mbps/10Mbps tiers, but if the hardware can do 25Mbps, they must provide 25Mbps. Sorry, but I don’t buy electricity or water or gas in tiers – my breaker panel is 200A, and if I want to use 200A, I can use it at any time. DItto water and gas – I can use as much as I want.

      Third, no quotas. You bill by the byte like my electricity, water and gas. If I use 0 bytes, I pay $0. If you want the cellphone provider model, then it must be a hard cap – if I pay for 60GB, I want my internet to stop at 60GB. If I request overage ability, you can charge me the regular per-byte rate. Which is set by the public regulatory agency.

      Finally, the meter should not count traffic I do not control. If someone pingfloods me, I shouldn’t have to worry about racking up a big bill. With water, gas, electricity, I’m in direct control of my consumption. With internet, I’m not.

        • syndicatedragon
        • 9 years ago

        I agree completely. I’m all for usage-based costs, *IF* the costs are reasonable, I get what was advertised, and there is complete transparency.

        • indeego
        • 9 years ago

        Last two seem awfully iffy. You do pay a flat rate for all utilities regardless of zero use.

        A Pingflood isn’t much traffic in the grand scheme of things and any decent ISP should block that by default. Users don’t have the faintest clue about their bandwidth uses or needs unless they go looking for them.

          • KarateBob
          • 9 years ago

          You must not have been pingflooded recently. People in datacenters have to pay bills of hundreds/thousands of dollars for gigabyte-usage overages because of DDoS attacks.

        • ludi
        • 9 years ago

        [quote<]Sorry, but I don't buy electricity or water or gas in tiers - my breaker panel is 200A, and if I want to use 200A, I can use it at any time[/quote<] I can go with you on the notion that the meter should be fair and visible to the consumer, but the rest is short-sighted on several counts. For water, tiered billing is becoming increasingly common in the US, particularly west of the Mississippi where water resources are scarce. Turns out that it works. Your maximum gas and electric consumption rates are more limited than you think by the upstream infrastructure, and if you and your neighbors were to all begin taxing the incoming service at a very high rate with a high coincidence factor, for example by all installing tankless water heaters, I guarantee the existing service infrastructure would require significant upgrades and the whole lot of you would see a special improvement fee come rolling into your mailbox. With the advent of smart-grid technologies, electric customers are increasingly being given the option of tiered rates or special discounts for moving energy consumption to off-peak hours or allowing high-demand appliances (e.g. air conditioners) to be selectively cut out in order to help prevent local overloads from becoming rolling blackouts, and in time these things could easily become mandatory. North Americans have historically been in the position to have uniquely low-cost energy available every which way they turn, but that's an incidental result of various economic and geographic factors, not a right. Electricity, Gas, Oil, Internet bandwidth, and everything else that comes down a pipe, wire, or airwave to make our lives more convenient, has energy costs and the more of them you use, the more they cost to provide. And the cost of provision goes way up if lots of people are using lots of a particular resource concurrently, even if the overall use across time is relatively average.

        • NeelyCam
        • 9 years ago

        Requiring an accurate meter is fine. Charging for pingfloods doesn’t seem unfair (although it’s not the provider’s fault – leaving them with the bill isn’t fair either).

        Other arguments are bad. Full speed? What does that mean? If the network is flooded with everybody watching a high-def Netflix stream at the same time on Saturday night, full speed may not be high enough to provide a HD stream to everybody.

        In that case, would you prefer to have everyone at equal footing, getting a mediocre speed (is this what you mean by “full speed” – i.e., maximum speed the system can provide), or provide people with an ability to pay more for a higher-quality service (higher bandwidth tier), while those who pay less get really bad speed and choose to wait for an ‘off-peak’ moment to watch the stream? I personally far prefer tiering, because it incentivizes being frugal with bandwidth use, which in the end should save money for everyone (… in theory)

        If everybody took a shower at the same time, sure as hell you wouldn’t be getting the water pressure you’d prefer. In other words, your water service isn’t “unlimited”. If everyone was using their 200A maximum at the same time, the strain on the power delivery network could drop your voltage to a point where your stuff wouldn’t work anymore. Your electric service isn’t unlimited either.

        And like indeego said, even if you don’t use any water/electricity/gas, you surely would have to pay some baseline monthly fees. Making the services available to you (and those meters running and maintained) isn’t free, regardless of how much you use the service.

      • bcronce
      • 9 years ago

      Netflix doesn’t care about how the data gets to the end user. Netflix actually outsourced to a CDN. But guess what. Level3 under bid the CDN.

      Level3 is an internet back-bone provider, and it’s freak’n huge. They don’t give a rats ass about Netflix’ bandwidth because it doesn’t matter. The internet backbone has no problems with current data loads. The only congestion you get is on last mile residential networks.

      Heck, Level3 wanted to open up 270gbits of bandwidth to Comcast. Not only would this mean Netflix would come pouring in to Comcast’s network via the internet instead of a CDN, but Comcast would get a virtually free upgrade to a 270gbits of internet bandwidth. Remember, Level3 hosts up internet connections for LOTS of large companies. This would mean Comcast would get a 270gbit connection right into the huge network that Level3 operates, and it would be covered under a peering agreement that they already have with Level3.

      Pretend you’re a web hosting company and you paid tens of thousands of dollars per month for your internet connection, then suddenly AT&T came knocking on your door and said “A customer of mine really likes your hosting company and we want to hook 270gbits of fiber into your data center and you get free unmetered bandwidth”, how would you react? “OMG! they’re stealing from me!”…

      sounds logical

      • cegras
      • 9 years ago

      How are backbones expensive to maintain?

        • Anomymous Gerbil
        • 9 years ago

        Is that a serious question?

          • bcronce
          • 9 years ago

          It is a valid question. Once you spend hundreds of millions to dig trenches to lay fiber and purchase routers to light up the fiber, how much does it cost to maintain those routers?

          Start up costs are several times the running costs.

            • CasbahBoy
            • 9 years ago

            I think it is a valid question as well. There are a good bit of man-hours going into local repairs, but I think those are going to be far, far, far outweighed by having that guaranteed $50/mo multipled by however many thousand or ten-thousand customers you have.

      • designerfx
      • 9 years ago

      not accurate at all. Internet backbones are expensive to build, not to maintain. Bandwidth is as close to free as it can get. There isn’t an additional cost to carry 50GB/s versus 5GB/s, there is only a hardware requirement to achieve it. It’s not like they build for GB/s nowadays, they build for TB/s and above, where the cost per gigabyte of transfer isn’t even a consideration for a real backbone provider.

      It’s basic network engineering, but apparently you are not familiar with that.

    • Rectal Prolapse
    • 9 years ago

    Telus is rolling out a service much like this:

    “What if you could get the same selection and service as Netflix from a hypothetical cable ISP service, but the ISP service was free as part of your TV or Internet bundle?”

    They are betting their entire company on it.

      • 5150
      • 9 years ago

      Based on your username alone, I will vote down all of your posts.

        • KarateBob
        • 9 years ago

        I prefer the Rectal prolapse name over the 5150 handle, but I’m more twisted than crazy.

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